House Defeats Bailout Package

[OP_Carl]

Originally Posted by Pressing-On

Is this developing or part of the first plan that got the reaction?

It is one of the developing reactions. The stock markets tanked (they were already ominously bearish BEFORE the vote) to the tune of the Dow closing 777 lower, oil closed around $98/bbl, and our currency closed so high that it was reportedly causing turmoil in foreign currency markets.

[Pressing-On]

Originally Posted by OP_Carl

It is one of the developing reactions. The stock markets tanked (they were already ominously bearish BEFORE the vote) to the tune of the Dow closing 777 lower, oil closed around $98/bbl, and our currency closed so high that it was reportedly causing turmoil in foreign currency markets.

I didn't mean a developing reaction, but specifically, were these three options in the first plan? I mean was it a solid go on privatizing Freddie and Fannie?

A serious proposal to alleviate the problems would do these three things:
1) Repeal the CRA.
2) Remove the mark to market requirement of Sarbanes-Oxley.
3) Privatize Freddie & Fannie.

[Pressing-On]

Op_Carl,
Could we survive if we did not go with a bail out at all? Are there other specific measures we could take? I'm not reading anything hard on that.

[OP_Carl]

A telling aspect of this bill can be discovered by conducting a simple thought experiment:

If it had been proposed instead that the treasury issue a credit of $2300 to every American man, woman, and child, with the two stipulations that it must be invested in a financial business, and that the principal $2300 be returned to the treasury when the investment is sold, with the citizen retaining all dividends, interest, and capital gains, just how much of the $700 billion would be re-invested in Freddie, Fannie, and the crumbling investment banks?

We would not want a stake in an un-reformed business model that takes excessive risk and fraudulently conceals them.

[Pressing-On]

Originally Posted by OP_Carl

A telling aspect of this bill can be discovered by conducting a simple thought experiment:

If it had been proposed instead that the treasury issue a credit of $2300 to every American man, woman, and child, with the two stipulations that it must be invested in a financial business, and that the principal $2300 be returned to the treasury when the investment is sold, with the citizen retaining all dividends, interest, and capital gains, just how much of the $700 billion would be re-invested in Freddie, Fannie, and the crumbling investment banks?

We would not want a stake in an un-reformed business model that takes excessive risk and fraudulently conceals them.

Exactly!

[OP_Carl]

Originally Posted by Pressing-On

I didn't mean a developing reaction, but specifically, were these three options in the first plan? I mean was it a solid go on privatizing Freddie and Fannie?

A serious proposal to alleviate the problems would do these three things:
1) Repeal the CRA.
2) Remove the mark to market requirement of Sarbanes-Oxley.
3) Privatize Freddie & Fannie.

None of that was in today's rejected bill. I have not read it yet, though.

Originally Posted by OP_Carl

It is one of the developing reactions. The stock markets tanked (they were already ominously bearish BEFORE the vote) to the tune of the Dow closing 777 lower, oil closed around $98/bbl, and our currency closed so high that it was reportedly causing turmoil in foreign currency markets.

The currency rise may have been a trick pulled by Bernanke. I just heard that he issued a large sum and exchanged currencies with some of our allies. I don't know the details yet.

[Pressing-On]

Originally Posted by OP_Carl

None of that was in today's rejected bill. I have not read it yet, though.

The currency rise may have been a trick pulled by Bernanke. I just heard that he issued a large sum and exchanged currencies with some of our allies. I don't know the details yet.

Yes, I heard Ron Paul pretty upset about that - on the currency being issued.

[OP_Carl]

Originally Posted by Pressing-On

Op_Carl,
Could we survive if we did not go with a bail out at all? Are there other specific measures we could take? I'm not reading anything hard on that.

We'll definitely experience some tough times of very tight credit if absolutely nothing is done. This could be prevented by ending our punitive policies toward banks that don't want to dive into the sub-prime cesspool.

If we allowed privatization of F & F, unharmed, prudent banks (of which there remain many) could step in and buy their assets and loans. They won't be interested if they must continue in this precedence of insanity.

[Pressing-On]

Originally Posted by OP_Carl

We'll definitely experience some tough times of very tight credit if absolutely nothing is done. This could be prevented by ending our punitive policies toward banks that don't want to dive into the sub-prime cesspool.

If we allowed privatization of F & F, unharmed, prudent banks (of which there remain many) could step in and buy their assets and loans. They won't be interested if they must continue in this precedence of insanity.

That sounds like a better deal. I hope you will keep up with this thread, educate us and post any relevant information so we can stay on top of this.

I'm sure they will go back on Thursday and Friday to do the "cry-baby" thing that is so akin to the values they share.

[Pressing-On]

I was reading what is being said will happen if we don't go for the bail out:

Failure won't just cost billions; it will cost trillions — in lost output, a shrunken job market, smaller retirements and lost productivity.

Republicans who voted against the bill did so for legitimate reasons. They don't like government getting too involved in the economy, and this package permits just that. But they also don't want to be blamed, as the minority party, if the deal turns sour.

That's already happening. Yes, more than 60% of Republicans voted against the rescue bill, but so did 40% of Democrats. That said, it's time for Republicans to take a deep breath, pull up their pants and help pass a bill. The nation's confidence is riding on it.

Americans must be made to realize it's not Wall Street that's being "bailed out," as the media keep putting it. It's Main Street.

The reason President Bush and Treasury Secretary Paulson moved so quickly and boldly is they fear a "seizing up" of financial markets. That means banks will stop lending to one another. It means companies that finance in the money markets — as many medium- and large-size businesses do — will be frozen out.

No lending, no business. Here's where Main Street comes in. Thousands and maybe millions will be laid off as commerce grinds to a halt. That's a real threat. Republicans will never get a perfect bill out of this Congress; compromises must be made by both sides.

http://www.ibdeditorials.com/IBDArti...07580926191184

Any additional comments?